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IAB: 2018 Final Numbers Show Digital Ad Spending Surpassed $107B

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The biggest news from the IAB’s 2018 Full Year 2018 Internet Advertising Revenue Report is that businesses spent $107 billion on digital outreach last year. That level reflects a 21.8% growth rate over the previous year. Digital now accounts for over 39% of all advertising in the U.S. Here’s what else your clients need to know.

The Power of Mobile

While total digital spending recorded a 16.8% compound annual growth rate, mobile advertising was on a tear last year. With a CAGR of 53.8%, mobile advertising amounted to $69.9 billion or 65% of total digital spending in 2018.

Power Play By Heavy Hitters

When it comes to selling digital advertising, your clients are up against tough competition. The top ten companies accounted for 75% of total spending. These heavy hitters, think Facebook and Alphabet, managed to snag another 3% of the digital ad pie during 2018. The top 11 to 25 companies captured 7% of total ad spending and everyone else shared the remaining 18%.

Spending by Format

Your clients should also know how marketers are spending their digital dollars. Last year, the major formats broke out as follows. Comparable figure for 2017 appear in parentheses.

  • Search 45% (46%)
  • Banner 31% (31%)
  • Video 15% (13%)
  • Other 9% (9%)

The spending patterns indicate a rising interest in video and a slight drop-off in search. Remember that banner advertising includes display, rich media and sponsorship. Other includes classifieds, lead generation, audio and unspecified.

In mobile ad spending during 2018, all categories except video lost a slight share. That’s because mobile video grew from 12% in 2017 to 15% of the total in 2018. Between 2016 and 2018, marketers increased their purchases of mobile video advertising from $4.0 billion to $10.2 billion.

Ad spending by media category in 2018 looked like this:

  • Internet advertising 39.24%
  • TV 25.91%
  • B2B 9.57%
  • Magazines 7.32%
  • Radio 6.5%
  • Newspaper 5.72%
  • OOH 3.66%
  • Music 1.21%
  • Video games 0.53%
  • Cinema 0.35%

How do your clients’ ad budgets compare? Share this data with them and then talk about the best ways to reach their target audiences. Consult the profiles available on AudienceSCAN, available at AdMall from SalesFuel, for more information on which ad formats drive consumers to take action.

Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-owner of several small businesses in the health care services sector.